SWOT Analysis of Joe Louis Arena in Detroit, MI

Strengths
– A new stadium offers the team more revenue from additional suites and corporate sponsorships.

Weaknesses
– The Joe Louis lease expires July 1, 2010, but the Ilitch family has to declare its intentions this summer.

– How the Ilitch family would finance such a venture when it’s hard to borrow money to buy a Mazda let alone an 18,000 seat hockey arena.

– Debt financing by the team is iffy at best and has hampered stadium projects elsewhere in the country.

– As popular as the Wings are, the use of any tax money — sales or otherwise — on a stadium project in stimulus times is going to be a tough sell.

– While most of the talk about empty seats in Detroit comes back to “it’s the economy

Opportunities
– Mike Ilitch has “until June 30 to tell Detroit if he will modernize the 30-year-old, city-owned arena or construct a new venue that likely would cost $200 million to $300 million.”

– What the city gains and loses if the Wings move to a new arena

– The Wings could ask for an extension on their decision

– Financing a new stadium through a combination of private money from the Ilitches and taxpayer money through an extension of local hotel and car-rental taxes

– If the Red Wings renew the lease and renovate the Joe, according to Crain’s “the city immediately loses the ticket taxes and in five years loses the surcharge on concessions and suites.” So maybe a new arena would be in Detroit’s best interest.

– Detroit could start charging for police and landscaping services (currently provided for free), and could collect property taxes beyond the current cap of $252,000 annually.

– Build a new arena in Windsor and the problem is solved.

– Just tell people your moving to Kansas City and suddenly everything will fall into place and 300 million dollars will suddenly “appear” for you to build a new arena. Crude business technique, but it gets the job done.

Threats
– On the financing front, the current economic climate makes the credit needed for an arena project tough to come by.

– If we get a new arena, I hope it’d still be called Joe Louis Arena; it just wouldn’t feel right and Detroit would lose a little bit of history if we did.